"Good" union contracts lead to job losses

See JD Vance Courts Sean O’Brien and the Teamsters by Allysia Finley. Excerpts:

"In the 2023-24 election cycle, 92% of Teamsters PAC donations to federal candidates went to Democrats, as did 91% of the union’s contributions to party committees."

[there was] "a report in February accusing two former Teamster officials of treating the union credit card “as a blank check to permit them luxury living without limit,” including restaurant tabs for meals with friends topping $3,000."

"In 2023, Yellow Corp., one of the country’s largest trucking companies, sought financial concessions from the Teamsters to stay in business. Mr. O’Brien refused and tweeted an image of a gravestone reading “Yellow 1924-2023.” The company filed for bankruptcy, and 22,000 Teamsters lost their jobs.

After threatening UPS with a strike that summer, Mr. O’Brien won a deal that increased average compensation for full-time drivers over five years to $170,000 from $145,000, including zero healthcare premiums and as much as seven weeks of vacation. Rising labor costs prompted UPS to cut 34,000 nonmanagement jobs last year, with another 30,000 planned for this year."

 

Virginia Is for Higher Taxes—and Gerrymanders

Gov. Spanberger’s popularity takes a hit as she abandons the center

WSJ editorial. Excerpts:

"Unlike in private industry, collective bargaining in government isn’t adversarial. Public unions sit on both sides of the table since they fund the campaigns of the politicians with whom they “negotiate.” The incentive is to give away the store to union allies"

"Wisconsin Republicans in 2011 ended this cycle by limiting government collective bargaining, which has saved taxpayers some $35.6 billion, according to the MacIver Institute. Studies have also found that the law improved student test scores, in part by allowing schools to pay teachers more for performance."  

Los Angeles Schools Can’t Do Math

Teachers get a rich new union contract despite awful student results

WSJ editorial. Excerpts:

The contract "increases salary scales by 11.65% over two years—double the rate of inflation—plus four weeks of paid parental leave and expanded student support services that will invariably require more hiring. Pay for new teachers will jump nearly 12% to $77,000."

"state per-pupil spending has soared in recent years to $27,418"

They will "have a workforce that is larger than when the district had 40% more students than we have today"

"the district and state are required to make payments equal to 30% of teacher salaries for their pensions. Teachers can retire at age 63 with a pension worth 85% of their final pay, plus free health benefits for life."

"Only 18% of Los Angeles eighth-graders scored proficient in math on the National Assessment of Educational Progress, compared to 27% nationwide." 

The Elevator Problem: How Rent-Seeking and Regulation Make Modern Life Unaffordable

By Patrick Carroll of AIER.

"On July 8, 2024, a guest essay by Stephen Smith on elevator policy was published in The New York Times. Though this may seem like a rather dry topic at first glance, Smith’s essay quickly dispelled that notion. The piece immediately went viral and has sparked a considerable amount of commentary from across the political spectrum. 

In the essay, Smith summarized the findings of a lengthy report on elevators that he had authored in May of that year for a think tank, the Center for Building in North America, which he founded in 2022. Prompted by a personal struggle with a lack of elevator access, Smith conducted a comprehensive review of the global elevator industry with the goal of answering a very specific question: Why are there so few elevators in North America compared to the rest of the world? 

“Despite being the birthplace of the modern passenger elevator, the United States has fallen far behind its peers,” he writes in the report. 

While the US has more than 1.03 million elevators — one of the highest totals in the world — it has fewer elevators per capita than any other high-income country for which data can be found, and Canada’s position on a per capita basis is similar. 

“…Part of this absence is due to the dominance of freestanding single-family houses in North America,” Smith acknowledges, “but even apartments in the United States are less likely to have elevators than those in much of Europe and Asia.” He points out, for example, that while New York City and Switzerland have similar populations, and a greater percentage of New Yorkers than Swiss live in apartment buildings, New York only has half the number of passenger elevators. 

“No matter how you slice the numbers,” he says, “America has fallen behind on elevators.” 

Smith’s findings all pointed to cost as the major factor. In Canada and the US, he says, new elevator installations cost at least three times as much as in Western Europe — roughly $150,000 compared to $50,000. What is driving this cost differential? Smith spends the majority of the report outlining three main culprits: mandatory minimum cabin sizes, labor issues with elevator installers, and technical codes and standards, which are harmonized for practically the whole world except the US and Canada. 

He writes: 

The North American approach is one of extremes. American and Canadian elevators have the largest cabins, the strongest doors, the most redundant communication systems, the best paid workers, and the most diversity of codes on the one hand. And in exchange, Americans and Canadians have the highest prices, the most limited access, the most uncompetitive market for parts, and the most restricted labor markets.

‘One of the Most Powerful Construction Unions in North America’ 

Smith’s comments on the labor point have attracted particular attention, because the inefficiencies are so glaring. As he wrote in The New York Times: 

Architects have dreamed of modular construction for decades, where entire rooms are built in factories and then shipped on flatbed trucks to sites, for lower costs and greater precision. But we can’t even put elevators together in factories in America, because the elevator union’s contract forbids even basic forms of preassembly and prefabrication that have become standard in elevators in the rest of the world. The union and manufacturers bicker over which holes can be drilled in a factory and which must be drilled (or redrilled) on site. Manufacturers even let elevator and escalator mechanics take some components apart and put them back together on site to preserve work for union members, since it’s easier than making separate, less-assembled versions just for the US. 

National Review economics editor Dominic Pino has noted, along with City Journal contributor Connor Harris, that this is a textbook example of what’s known as featherbedding, a practice in labor relations where unions obtain “make work” rules so that more union workers can be employed. 

The main elevator union in Canada and the US is the International Union of Elevator Constructors (IUEC), which Smith points out is “one of the most powerful construction unions in North America.” A 2011 comment from its General President, Dana Brigham, is revealing. 

“We can’t afford to sit back and see our trade dumbed down through factory prefabrication and preassembly to a point where all our members will have to do on the job is simply uncrate the elevator, set it, and plug it in,” Brigham said. Responding to this quote, Pino quips: “Heaven forbid elevators be easy to install.” 

It’s no wonder that featherbedding has a bad reputation. As Leonard Read observed in 1960, these practices are “as obviously absurd to the layman as they are disgusting to the economist.” 

In modern jargon, the economist’s disgust is often expressed by characterizing these practices as a kind of rent-seeking. Indeed, Alec Stapp, co-founder of the Institute for Progress, recently cited the elevator union rules that Smith uncovered as a good example of this concept. 

The notion of rent-seeking comes from the public choice school of economics, specifically the work of economists Gordon Tullock and Anne Krueger. Developed in the ‘60s and ‘70s, rent-seeking refers to any practice where you are trying to increase your wealth by changing the rules of the game, as compared to profit-seeking, which is trying to increase your wealth by being more productive. 

Common examples of rent-seeking include lobbying for tariffs or subsidies — or, in this case, union featherbedding. Profit-seeking, on the other hand, would include activities such as research and development aimed at creating new products to sell to customers. 

The word “rent” in this context refers to the old economic definition of rent, which is about the excess returns yielded by a factor of production, and not the colloquial definition of a payment made for the use of property.

Elevators Are Just the Tip of the Iceberg 

The other two factors that Smith discusses — minimum cabin sizes and technical codes and standards — are a classic case of government regulations making things considerably more expensive than they need to be (and regulation, particularly licensing, no doubt contributes to the labor issues as well). 

Now, if the mandated wastefulness that we find in the elevator industry were unique, it would still be cause for alarm, but the absurd truth is that regulations like this are everywhere. 

“When most people go through their daily lives, they don’t think about the ways in which government regulations are making their lives more difficult,” writes economist Scott Sumner, reflecting on Smith’s elevator story. “In almost every case I come across with systematic inefficiency, the root cause is counterproductive regulations.” 

It feels like every few months, a story like this comes along that grips the public’s attention. Calls for reform are heard, a public outcry fills the airwaves, maybe legislation is introduced. But it rarely occurs to people that these stories form a pattern. As such, we’ve fallen into this routine where our news feeds periodically become dominated with the latest absurd regulation story, and then at best we play whack-a-mole with legislation designed to address the Current Thing. 

Perhaps, if we can focus on the bigger picture, we should consider trying a different approach. Maybe there will come a point where we realize that news-driven piecemeal deregulation isn’t particularly effective, and more fundamental changes, such as blanket limits on government intervention in the economy, must be considered."

Governors Who Refuse Education Dollars

Not surprisingly, they’re pandering to teachers unions

By Daniel Lipinski. Mr. Lipinski, a Democrat, represented Illinois’s Third Congressional District 2005-21. He is a fellow at the Hoover Institution and the University of Dallas. Excerpt:

"Scholarships can be granted to cover a variety of education expenses. While many will fund tuition aid, scholarship nonprofits can choose to help families pay for tutoring, education technology, special-education services and other expenses. Eligibility will be limited to households earning less than 300% of the area’s median income, but many programs will likely focus on those most in need.

Teachers unions are pressuring Democratic governors to reject this golden goose. Their virulent opposition is revealing. Extra resources are what educators say they want. So why do their unions oppose receiving them? It seems they so abhor the idea that a scholarship might help parents choose which school their child goes to that they are willing to reject support for students in their own members’ classrooms."

These Three Red States Are the Best Hope in Schooling

By Nicholas Kristof. From The New York Times. Excerpts:

"The critiques have been effectively rebutted — for starters, they can’t explain the continuing gains in Mississippi or the magnitude of the gains. Just as striking, the Mississippi gains increasingly are being replicated in Alabama and Louisiana, as they follow similar approaches."

"Schools in Alabama respond firmly when a pupil doesn’t show up. After three unexcused absences, the school suggests a meeting with the parents. After five unexcused absences, school district officials summon parents and warn that they face legal risks if the truancy continues. At seven unexcused absences, the school may refer the parents to the juvenile court."

"These states have created a structure that closely monitors each school’s performance and incentivizes principals and teachers alike to do everything they can to get kids back in class and learning."

"In Mississippi, where the four-year high school graduation rate is now 89 percent, the State Department of Education each year must approve a “dropout prevention plan” from each school district."

"Measurement and metrics are particularly evident in strategies to get children to read by the end of third grade."

"So Dyhlan is pulled out of class along with other lagging readers every day for small-group tutoring in reading. Each child is tested weekly, with scores posted in a green, yellow or red zone, indicating how likely it is that they will pass a big reading test in the spring."

"in 2013, Mississippi adopted a third-grade gate — meaning that all third graders must pass a reading test to advance to fourth grade. The state then set up a system to monitor all students beginning in kindergarten to help get them on track to pass the test. Mississippi also revamped its curriculum, invested in pre-K and set up a system to coach teachers to improve their skills."

"A Black Mississippi child is two and a half times as likely to be proficient in reading by fourth grade as a Black California child."

"Likewise, low-income children are more likely to test proficient in reading in Mississippi or Louisiana than in California, Massachusetts or New York. A low-income fourth grader is almost twice as likely to test proficient at math in Mississippi as in Oregon."

"the Southern surge states lifted student achievement with only modest budgets. Spending per pupil in Alabama and Mississippi was below $12,000 in 2024, while in New York it was almost $30,000."

"A common thread in Mississippi, Alabama and Louisiana has been strong educational leadership, which in turn is able to impose a coherent strategy statewide. This includes “science of reading” curriculums, teacher coaching, measurement of student performance and accountability at all levels. In these states, everyone is rowing together; in Northern school systems, in contrast, there may be more oars but these often are pulling in different directions."

"It was easier to undertake these reforms in states like Mississippi that lacked strong teacher unions"

"Douglas N. Harris, an economist and education expert at Tulane University, said that the three states’ success is based in large part on demanding accountability and raising expectations. “Expectations for students, teachers and schools are central,” he said.

“The debate in education is often framed as a tension between excellence and equity,” Harris added. “I reject that. The system already has lower expectations for disadvantaged students. We need high expectations and standards to give them a better chance.”"

"The Southern surge states take an approach that . . . Disadvantaged students get extra help but are pushed to succeed on the same terms as everyone else, for that is what the adult job market will demand."  

Chicago’s Union Boss Gets a Promotion: Stacy Davis Gates will bring her educational failures to Springfield

WSJ editorial. Excerpts:

"Less than a third of Chicago eighth grade students are proficient in reading and math."

"In 2024 she told a Chicago radio station that academic testing “at best is junk science rooted in white supremacy” and “you can’t test black children with an instrument that was born to prove their inferiority.”"

"Yes, grading is racist, so stop using tests to judge students"

"Ms. Davis Gates sends her own son to a private school."

"Ms. Davis Gates recently memorialized black activist Assata Shakur, who killed a New Jersey police officer in 1973 as “a leader of freedom whose spirit continues to live in our struggle.”" 

The reduction in the length of the workweek in American manufacturing before the Great Depression was primarily due to economic growth and the increased wages it brought

See Hours of Work in U.S. History by Robert Whaples of Wake Forest University. Excerpt:

"Historically employers and employees often agreed on very long workweeks because the economy was not very productive (by today’s standards) and people had to work long hours to earn enough money to feed, clothe and house their families. The long-term decline in the length of the workweek, in this view, has primarily been due to increased economic productivity, which has yielded higher wages for workers. Workers responded to this rise in potential income by “buying” more leisure time, as well as by buying more goods and services. In a recent survey, a sizeable majority of economic historians agreed with this view. Over eighty percent accepted the proposition that “the reduction in the length of the workweek in American manufacturing before the Great Depression was primarily due to economic growth and the increased wages it brought” (Whaples, 1995). Other broad forces probably played only a secondary role. For example, roughly two-thirds of economic historians surveyed rejected the proposition that the efforts of labor unions were the primary cause of the drop in work hours before the Great Depression." 

How the Teamsters Cost 30,000 People Their Jobs

UPS, Yellow Corporation, and Boeing all gave into union demands. Massive layoffs followed.

By John Stossel. Excerpts:

"A couple years ago, the Teamsters demanded more pay from UPS. It seemed like UPS could easily afford it. The company made almost $13 billion in 2021."

"UPS used some of that money to hire more union workers. Then it offered them raises.

But Teamster boss Sean O'Brien wanted more. He threatened a strike.

UPS gave in."

"Today, full-time drivers make $170,000 a year."

"But paying for the new Teamster contract meant UPS wasn't as competitive as before. It raised some prices and lost business to other shippers.

Profit dropped.

In 2024, UPS laid off 12,000 workers. The next year, 20,000.

It wasn't just the wage hikes; it's also the work rules.

The Teamsters agreement includes hundreds of pages—limits on subcontracting, bans on employees working long hours, etc….many of which made it hard for a company to adapt and cut costs.

"These headline-grabbing union deals are delivering short-run sugar highs with long-run hangovers," says Mercatus Center economist Liya Palagashvili. "UPS is just one example of this."

Another was Yellow Corp—once one of the largest freight carriers in America.

Then the Teamsters threatened to strike, demanding faster payments of health care and pension benefits."

Yellow gave in. The strike was averted.

Days later, the trucking company shut down for good.

Thirty thousand people lost their jobs.

Asked if he felt responsible for the lost jobs, O'Brien said, "No, not at all…they were so mismanaged."

"That's true," says Palagashvili. "[Yellow Corp] was having a lot of financial issues. But if you're on the verge of collapse, the last thing you need is a Teamsters Labor Union contract that says you have to increase labor costs. Yellow is basically covered in gasoline, and Sean O'Brien comes and lights the match."

Meanwhile, union leadership help themselves. The Teamsters now brag that it has $1 billion in assets. Sean O'Brien pays himself more than $430,000 per year.

The same year Yellow went bankrupt, United Auto Workers went on strike against Stellantis, the company that owns Chrysler. Stellantis gave in, giving the UAW a pay raise and promising to open a new plant.

But then Stellantis started laying off workers: 1,340 during the strike and 2,450 more the next year.

In 2024, the International Association of Machinists and Aerospace Workers walked off the job demanding better pay from Boeing. Boeing gave in.

One month later, Boeing announced a 10 percent work force cut."

"Palagashvili says, "It wasn't trade that killed the Rust Belt. It was labor unions. Unions in the Rust Belt were striking. Companies said, 'Higher labor costs, tons of strikes, productivity isn't going up, we're going to relocate,' and they did."" 

‘Strangers in the Land’ Review: For Chinese-Americans, a Hard Road to a New Home

In the mid-19th century, Chinese immigrants built much of the developing American West. The community was often met with hostility and violence.

By Andrew R. Graybill. He is a professor of history at Southern Methodist University. He reviewed Michael Luo’s book Strangers in the Land: Exclusion, Belonging, and the Epic Story of the Chinese in America. Excerpts:

"Labor organizers were thus among the most virulent anti-Chinese agitators. Denis Kearney, the Irish-born leader of the Workingmen’s Party of California, declared in 1877 that “we intend to try and vote the Chinamen out, to frighten him out, and if this won’t do, to kill him out.”" 

"the most notorious episode came at a coal camp in Rock Springs, Wyo., in 1885, when white laborers, incensed by the presence of strike-breaking Chinese miners, slaughtered some 28 Chinese and razed their encampment. After weighing the evidence against the alleged perpetrators, a grand jury declined to indict them. News of the pogrom inspired mass expulsions of Chinese from the Pacific Northwest shortly thereafter, with the mayor of Tacoma urging a “speedy and final solution” to the so-called Chinese question."

"Much of this story—and especially the Chinese Exclusion Act of 1882, which for the first time restricted immigration on the basis of race—will be familiar to scholars and general audiences alike."

California’s Five-Alarm Pension Fire

Sacramento wants to roll back Jerry Brown’s 2013 reforms

WSJ editorial. Excerpts:

"Before the reforms, public-safety workers could retire at age 50 and receive a pension credit of 3% of their final salary for every year they worked."

"The 2013 reforms reduced the maximum pension credit for new hires to 2.7% and required them to work until 57 to receive it."

"Workers are also required to contribute half of the actuarial “normal cost” of their pensions"

"For every $10,000 that a state firefighter earns in compensation, the state pays $5,000 into the state pension fund."  

"Local governments are raising taxes to pay for ballooning pension costs."

[there is new] "legislation to roll back the 2013 reforms by letting public-safety workers retire earlier with bigger pension credits."

[which would] "also let unions collectively bargain with local governments to reduce worker pension contributions"

"Los Angeles firefighters make $213,600 on average. About a dozen last year made more than $300,000 in overtime alone. One battalion chief made more than $928,000 including overtime and benefits."

Manufacturing Went South

By Alex Tabarrok.

"Excellent piece by Gary Winslett in the Washington Post. As I pointed out in my piece on Manufacturing and Trade, the US is a manufacturing powerhouse. So why did the rust belt rust? Because manufacturing went South.

The Rust Belt’s manufacturing decline isn’t primarily about jobs going to Mexico. It’s about jobs going to Alabama, South Carolina, Georgia and Tennessee…In 1970, the Rust Belt was responsible for nearly half of all manufacturing exports while the South produced less than a quarter. Today, the roles are reversed, it is the Rust Belt that hosts less than one-fourth of all manufactured exports and the South that exports twice what the Rust Belt does.

Why the move? Better policies:

Economic research suggests that labor conflict drove much of the decline of the Rust Belt. Right-to-work laws in the South, by contrast, created more operational flexibility and attracted capital. The average unionization rate in the Rust Belt is 13.3 percent; in the South, it’s 4.3 percent. Southern states’ political leaders are quite open about how they see right-to-work as foundational to their competitiveness.

But that’s far from the only factor. The South offers cheaper electricity, a critical input for energy-intensive manufacturing. Ten states in the South have industrial electricity rates under 8 cents per kilowatt-hour; zero states in the Rust Belt do. Ohio has some of the country’s most restrictive wind-energy setback regulations. You know who doesn’t? Texas.

Despite the economic growth, Southern states have built so much housing that they kept costs from becoming unaffordable. Last year, both North Carolina and South Carolina each built more than four times as much new housing per capita as Massachusetts, according to U.S. census data. Florida, Georgia, Texas, Tennessee, South Carolina and North Carolina, all built more housing per capita than all of Illinois, Ohio, Michigan, Pennsylvania, California, New York and Massachusetts. That is not just a 2024 dynamic. That is true for every single year going all the way back to 1993. Comparatively low-cost housing makes it easier to attract and retain workers, which further attracts capital, which adds yet more investment and jobs, and the virtuous cycle spins upward.

…Immigration helps a lot, as well. More immigrants live in the South than any other region of the country. The region with the fewest immigrants? The Midwest. Immigrants promote growth, makes the workforce more robust, and create the goods and services that support manufacturing.

Right-to-work laws, cheap energy, affordable housing, low-cost land, fast permitting, low taxes, immigration. That’s a powerful combination…

Neither party wants to face these realities. The Republicans are mired in victimology and don’t see that the South’s success is built on exporting and immigration, both of which they are cutting. The Democrats don’t want to acknowledge right to work laws, cheap energy and low taxes.

Both parties prefer simple villains, whether it’s China or greedy corporations. But what’s needed isn’t more warm fuzzies about the way things used to be or globalization scapegoating. It is a clear-eyed approach that understands why companies choose Alabama over Ohio and that embraces the choices made by Southern states. That means leaning into globalization, right-to-work, all-of-the-above energy policy, permitting reform, immigration and low taxes. America’s economic future depends on embracing this reality rather than in indulging in turn-back-the-clock fictions."

A Lesson in the UPS Layoffs

The episode points toward the need to modernize the National Labor Relations Act

Letter to The WSJ. 

"Your May 1 editorial “Sean O’Brien and the UPS Layoffs” rightly notes that rich labor contracts can boomerang on the workers they’re supposed to help. My new research with Revana Sharfuddin shows the problem isn’t unique to United Parcel Service—it’s systemic.

Three decades of U.S. and European experience and 147 empirical studies demonstrate that when a union wields monopoly power to extract large, across-the-board wage hikes, employment growth slows, capital and R&D spending fall and the odds of future layoffs increase. Such dynamics account for more than half of the Rust Belt’s manufacturing job losses between 1950 and 2000.

The wage premium that once justified such risks has also withered. The private-sector union “bump” usually disappears in five to 10 years, leaving displaced workers chasing other, lower-paid jobs. In short, headline-grabbing union deals are delivering short-run sugar highs and long-run hangovers.

Modernizing the National Labor Relations Act so that employees are allowed to bargain for themselves would expand worker choice and force unions to compete for loyalty through the right mix of pay and benefits—all while ending the free-rider complaint that unions have with right-to-work laws.

Liya Palagashvili

Mercatus Center"

Sean O’Brien and the UPS Layoffs

His rich labor contract is costing Teamsters jobs at the shipping firm

WSJ editorial. Excerpts:

"United Parcel Service on Tuesday announced 20,000 job cuts"

"Last year UPS announced 12,000 job cuts"

They "raised average compensation for full-time drivers to $170,000 from $145,000 over five years" with "seven weeks of vacation"

"His [Sean O’Brien, the Teamsters boss] militancy helped drive trucking firm Yellow Corp. into bankruptcy in 2023, costing some 22,000 Teamsters their jobs."

Socialists Seek Control of New York Schools

Radicals transformed the Chicago Teachers Union (CTU) and hope to do the same to the Big Apple’s

By Mailee Smith. He is senior director of labor policy and staff attorney at the Illinois Policy Institute. Excerpts:

"Under the CTU’s influence, Chicago Public Schools saw academic achievement crater and enrollment collapse. From 2012-24, spending nearly doubled while scores dropped. Fewer than one-third of students could read at grade level in 2024, according to the Illinois State Board of Education. Even fewer were proficient in math. Enrollment has plunged by 77,000 since 2010. At the same time, the district’s budget exploded by 55% while the most recent contract will grant the average teacher a $114,429 salary, up from $86,439.

The CTU campaigned aggressively and won contracts proliferating a school model that has created poor student outcomes, capped charter-school expansion, and prevented near-empty schools from closing. Then the union successfully lobbied for an amendment to the Illinois Constitution that elevated union contracts over state law."

"New York already spends more than any other state on education—about $36,000 per student. Yet student outcomes are mediocre at best. Fourth-grade math and reading scores hover near or below the national average. The UFT’s calls for reduced class sizes and expanded staffing are more about money and power to pad their ranks than about helping students."

"The radical wing has already organized walkouts over political issues having nothing to do with education—rallying against Israel in November 2023, for instance. In Chicago, similar “days of action” are regularly used to bring students to the polls or engage on nonschool policy issues."

In Chicago, the Union Wins Again

Teachers get hefty raises, while test scores and enrollment fall

WSJ editorial. Excerpts:

"the Chicago Teachers Union has landed a roughly $1.5 billion agreement"

"teachers are expected to receive 4% cost of living raises the first year and as much as 5% a year in the next three"

"That adds up to more than 16% more for teachers in addition to the raises that teachers also get for years of service. Average teacher salaries are about $96,000"

"The contract also adds at least 800 more employees"

"the number of students in the district is shrinking. CPS had an enrollment of 325,305 in 2025, down from 361,314 in 2019" 

"the CTU and its affiliates spent more than $2 million on Mayor Brandon Johnson’s election"

Josh Shapiro Keeps Betraying Poor Pennsylvania Children

Pennsylvania’s governor campaigned on school choice. In office he bows to the teachers union

By Rachel Langan. Excerpts:

"Pennsylvania public schools have made no measurable improvement since 2003 to close achievement gaps of more than 25 points for black and Hispanic students, economically disadvantaged students, or English Language Learners."

"In 2022, the country’s biggest public-sector unions gave Mr. Shapiro’s campaign $4.5 million, more than the combined total for the next three top recipients nationwide." 

"In 2023 the governor negotiated a contract with the American Federation of State, County and Municipal Employees that gave double-digit pay raises for state workers."

"During his first state budget negotiations, he was set to sign Lifeline Scholarships into law. But union opposition quickly mobilized a small but loud pressure campaign, rebuking Mr. Shapiro for his “irresponsible” support for the program. The governor caved and vetoed his own campaign promise."

"Polling shows that 86% of Hispanic voters and 92% of black voters in Pennsylvania support Lifeline Scholarships."

The Teachers Unions Sue Trump for Control: The guardians of the status quo seek judicial intervention to save the Education Department

By Jason L. Riley. Excerpts:

"In exchange for a presidential endorsement in 1976, Jimmy Carter promised the National Education Association a stand-alone cabinet department. Joseph Califano, Carter’s HEW secretary, opposed the move, predicting in his memoir that it would be “virtually impossible for the Education Secretary to run the new department efficiently.”"

"Mr. Califano noted that his skepticism was shared by others at the time, including the press. “The editorial content across the nation was scathing,” he wrote, “and even included the liberal New York Times and Washington Post which said, ‘The bill is the inspiration of the NEA, an organization that has much the same relation to the public schools as the plumbers union has to the plumbing business.’ ”"

"why is the government’s $1.6 trillion student-loan portfolio being managed by the Education Department instead of by the Small Business Administration or the Treasury? And isn’t it redundant to have a separate Office for Civil Rights inside the Education Department when we already have a Justice Department responsible for protecting civil rights?"

"money that has been appropriated by Congress, mainly to low-income school districts through the so-called Title I program. These federal funds amount to only about 10% of all education spending"

"a lot of the funding that goes into states now goes with a lot of red tape, a lot of strings attached to it"

"federal funding program for disadvantaged students has a near-perfect record of being ineffective in improving outcomes"

"In 1966, a year after the Title I program was created, a frustrated Sen. Robert F. Kennedy exclaimed: “What happened to the children? Do you mean you spent a billion dollars, and you don’t know whether they can read or not?”"

"Spending has risen while test scores have stagnated, and U.S. performance on international assessments has worsened. Meanwhile, union-allied lawmakers have blocked reforms—charter schools, vouchers, tuition tax credits—that have proved both popular and effective, especially among low-income minorities."

" The money continues to flow with little or no accounting whether it’s being used responsibly, let alone effectively."

Productivity and Wages

By Kevin Corcoran of Econlib.

"In a recent post, I described a thought experiment where someone is stranded on deserted island, where resources are abundant but their ability to make productive use of those resources is very limited. In this situation, what happens if a new castaway washes ashore? With two people working together, things can improve. They can specialize and begin a division of labor, and collect more resources together than either could do alone. This would also be true if a third castaway washed ashore, and a fourth, and so on.

There’s another point this kind of thought experiment can help clarify. When envisioning this scenario, we’re just thinking about what would improve the castaways’ standard of living. With more people working together, their standard of living can increase. They can gather more food, build better shelters, and store more supplies. In this scenario, there are no “wages” being considered. We aren’t thinking about how many seashells they can gather to trade with each other as a primitive form of currency. The only way their standard of living can increase is if they can increase the amount of goods and services they can produce. As long as more people working together with an ever more extensive division of labor can produce more than before, their standard of living will continue to rise.

This fundamental idea is not changed in a modern economy with currency and wages. For people who are concerned about the American worker and want to ensure the wages of the American worker continue to rise, there is no way for that to happen unless productivity is also rising. Without an increase in the amount of goods and services available to Americans, wages cannot rise in any real sense, just as our castaways’ standard of living cannot rise unless they can make more productive use of their resources.

I’ve written before about Harold Daggett, the head of the a labor union known as the International Longshoremen’s Association. Daggett recently made many headlines with his simultaneous demands for massive wage increases for unionized dock workers along with insisting that American docks not implement modern automation – and his threats to shut down docks and cripple the American economy if he doesn’t get his way.

As John Stossel has recently noted, of all the world’s ports, not a single American port is in the top 50. This is because American ports, at the behest of the unions, have refused to implement the kind of productivity and efficiency enhancing automation that other nations use – at the added cost of making port work significantly more dangerous that it needs to be, leading to workers being needlessly killed and maimed on the job.

Daggett and the ILA, along with so many other union leaders and organizations, are demanding their workers get higher wages while also preventing the kind of advancements that would increase worker productivity. So if the port workers get a wage increase without increasing the productivity of what they do (and in fact keeping that productivity artificially low), their wage increase can only happen by means of making other Americans worse off. It is a naked and open demand to enrich one’s self at the expense one’s fellow citizens.

And this is the kind of behavior we would expect to see from people whose mindset is built upon a zero-sum fallacy. Just as this thinking can lead you to believe that an increase in the number of workers harms existing workers because more labor must mean cheaper labor, if you believe one person’s gain must be another person’s loss then of course you won’t hesitate to demand others be made worse off for your situation to improve. Because, in your mind, that’s all anyone can ever do anyway, in a zero sum world. Economics teaches us that we have opportunities to work together and make each other better off in the process. Protectionist populism teaches people that if they ever want to rise up they have to step on the necks of their neighbors to do it.

Perhaps we should update Thomas Carlyle’s (widely misunderstood) declaration that economics is a “dismal science” and apply that moniker to the zero-sum thinking of populists and protectionists. But then again, it might be too generous to such a mindset to call it a “science,” dismal or otherwise."

The Price of Rivian’s $6 Billion Rescue

The company vows not to oppose the UAW at its Illinois factory

WSJ editorial.

"Government money always comes with a price, and now we are learning what Rivian Automotive’s is for its recent $6 billion loan from the U.S. Energy Department. The struggling electric-vehicle manufacturer will subject its workers to union domination.

President Biden in September issued an executive order directing agencies to prioritize projects that promote “positive labor-management relations” with “agreements designed to facilitate first collective bargaining agreements, voluntary union recognition, and neutrality by the employer with respect to union organizing.” Want government money? Better surrender to the unions that back Democratic politicians.

Rivian has been tangling with the United Auto Workers union that wants to organize its employees. Bloomberg News reports that Rivian has now struck a so-called neutrality agreement with the UAW that commits the company not to oppose unionization efforts at its factory in Illinois. While the deal doesn’t take effect until the company reaches certain profitability and other metrics, it greases the wheels for future unionization.

Ford Motor likewise struck a neutrality agreement with the UAW at its new Tennessee EV plant that let the unions organize workers through a card-check process rather than a secret-ballot election. The Energy Department recently finalized a $9.6 billion loan for the Ford-SK On battery joint-venture in Tennessee and Kentucky.

One risk for the companies is that the union’s costly demands make it harder to make money on EVs. Rivian lost $107,043 on each vehicle it sold during the first nine months of the year. Ford is losing about half as much on each EV. Both are struggling to compete with Tesla, which is profitable and not unionized.

Rivian executives project that the company could soon become profitable thanks to sales of credits to manufacturers struggling to comply with EV mandates. But such credits will lose value if the new Trump Administration rolls back the Biden greenhouse-gas emissions standards and yanks a waiver for California’s EV quotas.

In agreeing to the union neutrality agreement, Rivian is undermining its chances of future success on which the Biden crowd has bet $6 billion. Industrial policy inevitably puts political demands above economic or commercial priorities, as taxpayers may learn the hard way with Rivian."